Building Your Impressions: Handling Your Collections with Care, Part Three

Sound strategies to make sure the money gets in the bank-your bank.

billstopay_275We care about our finances. We care about money. It fuels a business to keep it going. What we have to remember is that the means to the money is through people. So while caring about the money we also have to handle our collections of it with care, the kind of care that builds impressions.

Here are two ideas for helping you to collect with care in order to improve your cash flow and build impressions along the way:

Net 10-not 30.

If you want your money faster, put faster terms on it. Net 10 isn’t uncommon today. I always say businesses move at the speed of sales. Sales is not just the jobs themselves that we sell, but sales also refers to revenue. Revenue is not realized until it is in the bank-your bank.

By working with a net 10 policy you have more time to react faster if necessary, like with liens. Often, and commonly, you’ll find the lien process has to be started and accomplished in a very short time frame from the time you sent the first invoice.

Thirty days is not uncommon. If your client fails to pay after those thirty days, you can’t take advantage of the lien. If you had an inkling of payment troubles from that client earlier, you’d have time to pursue the lien.

Internal processes-things you can do that help collections.

By invoicing with net 10 terms you have time to react if needed. In order to react, you have to know if you need to-first.

In order to know, we implemented some internal steps to take with our collections efforts. Use email as a first choice with clients. Send mail as well if the relationship and the email billing has not been very well established.

After invoicing, schedule a follow-up call, not email, within 14 days if payment has not been received. If a client did send the payment at the end of the net 10 timeline, chances are the check is in the mail. No harm done if the call is conducted cordially.

If payment was not sent, use that phone call to politely ask if they did receive the invoice and ask if there are any issues. Take notes. Document the call, the conversation, and the vibe. Sometimes you can smell trouble over the phone.

After invoicing and calling in those first two weeks of a job’s completion, send a statement in week three. Stick to your terms and start applying a late fee or financial charge. Use email if possible. Call within two days. Document.

NOTE: Yes, some clients will insist on a net 30 day. Let them push for that. You push for 10, first.

To read Handling Your Collections with Care, Part One, click HERE.

To read Handling Your Collections with Care, Part Two, click HERE

Scott Franko

Scott Franko

Scott Franko

Scott Franko owned Franko Design Concepts and Consulting. He formerly owned and operated a multi-division sign, graphics and custom fabrication business.

View all articles by Scott Franko  

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